Posted on June, 21, 2023 at 06:12 am
Rwanda’s Bank of Kigali has joined the International Finance Corporation (IFC)’s Global Trade Finance Programme (GTFP), which positions it to support the growth of trade finance in the country.
This will be the first project under the MIGA IFC Trade Finance initiative, where MIGA and IFC jointly support selected public banks in emerging markets for cross-border trade flows.
The $20 million trade finance facility from IFC, which will be issued as a guarantee for Bank of Kigali, will complement the bank’s capacity to deliver trade finance solutions and assist in developing new trade partnerships with foreign correspondent banks.
Through this initiative, IFC will so support the Bank of Kigali in its strategy focusing on financing SMEs and women businesses in Rwanda.
Speaking on this, Mr Makhtar Diop, IFC’s Managing Director, said, “Trade finance is paramount in ensuring accessibility, which promotes growth and sustainability in economies.
“Supporting SMEs and women in business is a priority for IFC, and we will work with Bank of Kigali to promote the trade finance needs of SMEs and women-owned businesses in Rwanda.”
“We are excited to join the network of IFC’s GTFP Program. By partnering with IFC through its Global Trade Finance Program, the Bank of Kigali will have enhanced access to the GTFP network for its trade finance liquidity and limits need, and eventually be able to support local businesses grow and reach new markets,” said Mrs Diane Karusisi, CEO of Bank of Kigali.
“Supporting state-owned banks is core to MIGA’s mandate, and we are very pleased be able to provide additional trade finance guarantee capacity to the IFC in support of the economy of Rwanda,” said Mr Hiroshi Matano, Executive Vice President of MIGA. “MIGA hopes to be able to collaborate with IFC in other markets as well.”
The GTFP extends and complements the capacity of banks to deliver trade financing by providing risk mitigation in new or challenging markets where trade lines may be constrained. In the fiscal year 2023, IFC issued more than $9 billion in guarantees under the programme, close to 70 per cent in low-income and fragile countries.
Through the GTFP bank network, local financial institutions can establish working partnerships with a vast number of major international banks in the program that can broaden access to finance and reduce cash collateral requirements.
This enables the continued flow of trade credit into the market at a time when imports may be critical, and the country’s exports can generate much-needed foreign exchange.
Source: Business Post